Christopher Knight of HMS Discusses Insurance Regulatory Issues at PAMIC’s Market Regulation Seminar
FOR IMMEDIATE RELEASE
Back in June 2011, we reported here that Congress’ brand new creation known as the “Federal Insurance Office” (FIO) had found its first Director in former Illinois regulator Michael McRaith. We cautiously anticipated then the issuance of the FIO’s initial report to Congress, scheduled for January, 2012, regarding the effectiveness of the state-based system of insurance regulation, as well as recommendations for changes and improvements. Industry stakeholders speculated then about what the establishment of this new federal bureaucracy might signal and what role the Feds might be looking to assume in their industry in the wake of scares about financial instabilities surrounding major U.S. insurers. The decades-old debates about federalism in the regulation of insurance were sparked anew and we waited for word from Director McRaith and his Office. And we waited. A year passed and we waited some more. Another year passed and the Feds rolled out their health insurance marketplace and that went…well, they did roll it out! You may have heard.
Under Pennsylvania’s Storage Tank and Spill Prevention Act, owners, operators and installers of underground storage tanks who incur liability for cleanup of tank spills are entitled to reimbursement from the Underground Storage Tank Indemnification Fund under certain circumstances, but only if they advise the Fund of a claim within 60 days “after the confirmation of a release.”
Small group plan health insurance rate increases of more than 10% must be filed and approved by the Pennsylvania Insurance Department under a new law signed by Governor Corbett in late December, 2011. The expanded authority under Act 134 to review small group health plan rates in Pennsylvania comes in response to provisions in the Patient Protection and Affordable Care Act (PPACA) that give the federal government the authority to disapprove such increases unless they are reviewed at the state level.
The Pennsylvania Insurance Department has delivered a clear message to all licensed insurance producers: you are expected to provide guidance to flood victims, even if they have no insurance to cover their losses.
Few current social or political topics stir the emotions quite as much as health care reform. Whether you believe that the Patient Protection and Affordable Care Act (PPACA) is a sign of imminent and apocalyptic American socialism or an important step towards ensuring that all Americans have access to basic health care, nothing can ruin a tranquil Sunday dinner at Grandma’s house quicker than prodding Uncle Charlie into a debate about whether Uncle Sam is taking over our health care system. But politics aside, if anyone was naïve enough to hope that the health care debate ended when President Obama signed the bill into law in March, 2010, they are facing the reality that 18 months later there still seem to be many more questions than answers when it comes to the future of health insurance in America. And in Pennsylvania, while state government officials are busy deciphering how their citizens can get the most out of the PPACA, they are also distracted with having to deal with another potentially critical health care problem in the western half of the state - where an impasse between the area’s largest hospital system and the dominant health insurance company threatens access to doctors and hospitals for millions of patients who already have good insurance.
Pennsylvania Insurance Commissioner Mike Consedine today made public his determination that the coverage limits required by law for medical professional liability will remain unchanged for 2012. In an announcement much-anticipated by insurers and health care providers, Commissioner Consedine indicated that “it cannot be definitively found that additional basic insurance capacity is presently available and as such…limits of coverage for the primary market and Mcare shall remain unchanged.”
Michael McRaith officially began his new job earlier this month as the first Director of the Federal Insurance Office (FIO or Office) after serving for the past six years as Director of the Department of Insurance in President Obama’s home state of Illinois. The FIO was established by the Dodd-Frank financial reform legislation of 2010 as an office within the U.S. Department of the Treasury, and represents a part of the Congressional response to concerns about the financial stability of certain large domestic insurers and their subsequent taxpayer bailouts in 2008 and 2009. Director McRaith will report to Treasury Secretary Timothy Geithner.
At this time the FIO has only an advisory role and monitoring authority over the business of insurance, while regulatory authority remains vested at the state level. However, the establishment of the Office has caused a great deal of speculation, both within the industry and among state regulators, regarding whether it represents a significant first step towards shifting insurance regulation to the federal level in the future.